(23 December 2008) Central America and the Caribbean will be the subregions most affected by the stagnation in tourism caused by the financial crisis.
About 75% of tourists to the English-speaking Caribbean, over 40% of those visiting Central America, and more than 75% of tourists to Cuba and the Dominican Republic come from developed economies in recession, says the report Preliminary Overview of the Economies of Latin America and the Caribbean 2008, recently published by ECLAC.
The World Tourism Organization (UNWTO) estimates that in 2008, tourism will grow between 2% and 3%, very distant from the 6.6% reached last year. In 2009, it is expected to expand even less, somewhere between 0% and 2%.
Tourism began experiencing a strong deceleration between June and August 2008 due to the increasing deterioration of real income and consumer expectations, the volatility of exchange rates, and restraints on consumer loans due to the financial crisis.
In Latin America and the Caribbean, tourism is one of the economic activities that has flourished most in recent years, and its importance has increased as a generator of value-added and income, says the ECLAC report.
In the Caribbean, tourism related exports compose about 20% of GDP, while in Central America, it is an average 5%, but reaches nearly 10% in the Dominican Republic, Cuba and Costa Rica.
Tourism expenditures in the English-speaking Caribbean -with the exception of Guyana, Surinam and Trinidad & Tobago- are equivalent to 15%-41% of GDP. As a proportion of total exports of goods and services, expenditures are even greater, given that tourism is the main source of income and the motor of these economies.
In the first eight months of 2008, the arrival of tourists to Central America and South America continued rising by 9.4% and 7.2%, respectively. However, in the Caribbean it grew only 3%.
Between June and August, demand for tourism services in the Caribbean has come to a standstill due to the lower number of visitors to the Bahamas, Barbados, Bermudas and Puerto Rico, four destinations visited mainly by United States and European travelers. In Mexico, arrivals increased 4.8% during the same period, followed by a drop in the flow of tourists.
Lower inflation and currency depreciation in several Latin American and Caribbean nations could partially compensate the impact on regional tourism caused by the financial crisis. Competitive prices and the exchange rate in tourism destinations may play a significant role in sustaining the activity.
Investments in recent years in several countries have placed them in a better position to compete for the decreasing demand for tourism services expected in the near future, adds the ECLAC report.
See also:
cepal.org
